DoD's $226M contract for aeronautical systems technical assistance awarded to Anteon Corp. shows significant cost overruns

Contract Overview

Contract Amount: $226,300,512 ($226.3M)

Contractor: General Dynamics Information Technology, Inc.

Awarding Agency: Department of Defense

Start Date: 2000-12-26

End Date: 2015-12-31

Contract Duration: 5,483 days

Daily Burn Rate: $41.3K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 2

Pricing Type: COST PLUS AWARD FEE

Sector: Defense

Official Description: 200111!000005!5700!GU01 !ASC/PK AERONAUTICAL SYSTEMS CTR !F3365700C0016 !A!N!*!N! !20001226!20031231!067641597!067641597!945774701!N!ANTEON CORPORATION !3211 JERMANTOWN RD, STE 70!FAIRFAX !VA!22030!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !+000000353640!N!N!000000000000!R421!TECHNICAL ASSISTANCE !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !541611!*!*!3!A!S! !*!*!*!B!*!*!A! !A !N!R!2!002!B! !Z!N!Z! ! !N!C!N! ! ! !Z!Z!A!A!000!A!C!N! ! ! ! ! ! !0001!

Place of Performance

Location: BURR RIDGE, COOK County, ILLINOIS, 60527

State: Illinois Government Spending

Plain-Language Summary

Department of Defense obligated $226.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC. for work described as: 200111!000005!5700!GU01 !ASC/PK AERONAUTICAL SYSTEMS CTR !F3365700C0016 !A!N!*!N! !20001226!20031231!067641597!067641597!945774701!N!ANTEON CORPORATION !3211 JERMANTOWN RD, STE 70!FAIRFAX !VA!22030!03000!013!51!ARLINGTON !ARLIN… Key points: 1. The contract's final value of $226.3M represents a substantial increase from its initial award, indicating potential issues with cost estimation or scope creep. 2. Awarded under full and open competition, the contract saw two bids, suggesting a moderately competitive environment. 3. The 'Cost Plus Award Fee' pricing structure could incentivize contractor performance but also carries inherent risks of cost escalation if not managed tightly. 4. The contract duration of over 15 years (5483 days) is exceptionally long, raising questions about the initial planning and the sustained need for these specific services. 5. The primary service category, 'Technical Assistance,' is broad and could encompass a wide range of activities, making precise performance evaluation challenging. 6. The significant difference between the initial award amount and the final cost warrants a deeper look into the factors driving this escalation.

Value Assessment

Rating: concerning

The final contract value of $226.3 million is significantly higher than the initial award amount, suggesting a substantial cost overrun or scope expansion over its long lifecycle. Benchmarking this against similar technical assistance contracts is difficult without more granular data on the services provided. However, the sheer magnitude of the increase over the contract's duration raises concerns about initial pricing accuracy and ongoing cost management effectiveness.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

This contract was awarded under full and open competition, with two bids received. While competition existed, the low number of bidders might suggest limitations in the market for these specialized services or potential barriers to entry. The presence of two bidders indicates some level of price discovery, but the extent to which this competition drove down costs cannot be definitively assessed without knowing the bid details.

Taxpayer Impact: A competitive award process is generally favorable for taxpayers, as it aims to secure the best value. However, with only two bidders, the potential for cost savings might have been constrained compared to a more robustly competed contract.

Public Impact

The primary beneficiary is the Department of Defense, specifically entities requiring aeronautical systems technical support. The contract delivered technical assistance services crucial for the maintenance, development, or operation of aeronautical systems. The geographic impact is likely concentrated around the contractor's facilities and the DoD installations they supported, primarily in Virginia. The contract supported a workforce involved in specialized technical and management consulting services within the aerospace and defense sector.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Significant cost growth from initial award to final value suggests potential issues with initial budgeting, scope management, or contractor performance incentives.
The exceptionally long contract duration (over 15 years) raises questions about the initial planning horizon and whether the services remained relevant and cost-effective throughout.
The 'Cost Plus Award Fee' structure, while intended to incentivize performance, can lead to cost overruns if not rigorously monitored and controlled.
The broad nature of 'Technical Assistance' makes it difficult to ascertain the specific value delivered and whether it aligned with evolving DoD needs.
Limited competition (two bidders) may have reduced the pressure on the contractor to offer the most competitive pricing.

Positive Signals

Awarded under full and open competition, indicating an effort to leverage the broadest possible market.
The contractor, Anteon Corporation (later acquired by General Dynamics), likely possessed specialized expertise required for aeronautical systems.
The contract successfully delivered technical assistance over a prolonged period, suggesting a sustained need and the contractor's ability to meet requirements.

Sector Analysis

This contract falls within the professional, scientific, and technical services sector, specifically focusing on management and technical consulting related to aeronautical systems. The aerospace and defense industry relies heavily on such specialized support for complex systems. Comparable spending benchmarks are difficult to establish without detailed service breakdowns, but large, long-term technical support contracts are common within the DoD, often running into hundreds of millions of dollars.

Small Business Impact

There is no indication that this contract involved small business set-asides. Given the large dollar value and specialized nature of aeronautical systems technical assistance, it is likely that prime contractors would be large businesses. Subcontracting opportunities for small businesses may have existed, but this information is not detailed in the provided data.

Oversight & Accountability

Oversight for this contract would have been managed by the Defense Contract Management Agency (DCMA). The 'Cost Plus Award Fee' structure implies performance metrics and reviews to determine award fees, serving as an accountability measure. Transparency is generally facilitated through contract databases like FPDS, but detailed performance reports and Inspector General findings related to this specific contract are not publicly available in this data.

Related Government Programs

Aeronautical Systems Support Contracts
Technical and Management Consulting Services
Department of Defense IT and Professional Services
Cost Plus Award Fee Contracts
Long-Term Service Contracts

Risk Flags

Significant Cost Growth
Long Contract Duration
Limited Competition
Broad Service Scope

Frequently Asked Questions

What is this federal contract paying for?

Department of Defense awarded $226.3 million to GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC.. 200111!000005!5700!GU01 !ASC/PK AERONAUTICAL SYSTEMS CTR !F3365700C0016 !A!N!*!N! !20001226!20031231!067641597!067641597!945774701!N!ANTEON CORPORATION !3211 JERMANTOWN RD, STE 70!FAIRFAX !VA!22030!03000!013!51!ARLINGTON !ARLINGTON !VIRGINIA !+000000353640!N!N!000000000000!R421!TECHNICAL ASSISTANCE !S1 !SERVICES !3000!NOT DISCERNABLE OR CLASSIFIED !541611!*!*!3!A!S! !*!*!*!B!*!*!A!

Who is the contractor on this award?

The obligated recipient is GENERAL DYNAMICS INFORMATION TECHNOLOGY, INC..

Which agency awarded this contract?

Awarding agency: Department of Defense (Defense Contract Management Agency).

What is the total obligated amount?

The obligated amount is $226.3 million.

What is the period of performance?

Start: 2000-12-26. End: 2015-12-31.

What specific technical assistance services were provided under this contract?

The contract data indicates 'Technical Assistance' under the PSC code R421 and NAICS code 541618 (Other Management Consulting Services). However, the specific nature of the technical assistance is not detailed. It could range from engineering support, logistics analysis, program management assistance, systems integration, to maintenance planning for aeronautical systems. Without further documentation, the precise scope of services remains broad. The significant cost increase suggests the services may have evolved, expanded, or encountered unforeseen complexities over the contract's 15-year lifespan.

How did the final cost compare to the initial estimated value or ceiling?

The provided data shows a final obligated amount of $226,300,511.82. While the initial award amount isn't explicitly stated as a ceiling, the significant difference between the initial award (implied by the final value being much higher) and the final cost indicates substantial growth. The contract duration of over 15 years (5483 days) also suggests that the initial estimates may have been for a shorter period or that significant modifications extended the contract's value and duration. This level of cost growth warrants scrutiny into the contract's management and the factors driving the escalation.

What were the key performance indicators (KPIs) and award fee criteria for Anteon Corporation?

The contract type is 'Cost Plus Award Fee' (CPAF), which inherently includes performance criteria tied to award fees. However, the specific KPIs and award fee criteria are not detailed in the provided summary data. Typically, for technical assistance in aeronautical systems, KPIs might include meeting technical specifications, timely delivery of reports or analyses, successful problem resolution, adherence to project milestones, and overall customer satisfaction. The DCMA would have been responsible for evaluating Anteon's performance against these criteria to determine the award fee amount.

What is the significance of the contract's long duration (over 15 years)?

A contract duration exceeding 15 years is exceptionally long for a single award, especially in a field like aeronautical systems where technology and requirements can change rapidly. This longevity suggests either a stable, long-term requirement for a specific type of support or potentially a lack of re-competition or market shifts over time. It raises questions about whether the initial scope remained relevant, if the pricing remained competitive throughout, and if breaking the requirement into smaller, more frequent contracts might have yielded better value or spurred innovation.

Were there any notable issues or challenges reported by oversight bodies like the Inspector General?

The provided data does not contain specific details regarding Inspector General (IG) reports or other oversight findings for this particular contract. While the significant cost growth is a red flag, without access to specific audit reports or IG investigations, it's impossible to determine if formal issues were identified, investigated, or resolved. General contract oversight by DCMA would have occurred, but the nature and findings of that oversight are not detailed here.

How does this contract compare to other similar technical assistance contracts within the DoD?

Comparing this contract requires detailed knowledge of similar technical assistance efforts. However, the $226M final value and 15+ year duration place it among significant, long-term support contracts within the defense sector. Many DoD contracts for technical and engineering support run for extended periods and reach high dollar values. The key differentiator here is the substantial increase from the initial award to the final cost, which may be higher than typical cost growth percentages for well-managed contracts in this category.

Industry Classification

NAICS: Professional, Scientific, and Technical Services › Management, Scientific, and Technical Consulting Services › Other Management Consulting Services

Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Solicitation Procedures: NEGOTIATED PROPOSAL/QUOTE

Offers Received: 2

Pricing Type: COST PLUS AWARD FEE (R)

Evaluated Preference: NONE

Contractor Details

Parent Company: General Dynamics Corp (UEI: 001381284)

Address: 3211 JERMANTOWN ROAD, FAIRFAX, VA, 22030

Business Categories: Category Business, Not Designated a Small Business

Contract Characteristics

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Cost or Pricing Data: NO

Timeline